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The minister will also be bringing forward new legislation to revise governance arrangements for the amount of advertising all broadcasters - public and commercial - are allowed to broadcast.

This could involve a cap in the number of minutes of advertising per hour that public service broadcasters are allowed to transmit.

He will be commencing a public consultation process on how the new public service broadcasting charge will be applied and collected.

Mr Rabbitte is also establishing a review into the scope for further efficiencies in RTÉ, including its performing groups model and how it delivers Irish language radio services.

The Government acknowledges that RTÉ has already delivered savings of €104 million (24%) since 2008, and has reduced staff numbers by 21%.

It also notes that RTÉ saw a 35% fall in commercial income between 2008 and 2012.

It points out that RTÉ is currently getting 46% of funding from commercial sources, reflecting a substantial shift towards reliance on public funds.

The Government also wants RTÉ to improve its procedures for separating public and commercial activities and the allocation of costs.

It notes the recommendation of the Broadcasting Authority of Ireland that public service broadcasting should continue to be sufficiently well funded.

The BAI believes that a greater level of public funding should be made available on four conditions:

- a further round of efficiencies in RTÉ
- a greater focus on the use of the independent production sector
- improved procedures to identify how public money is applied
- a possible time cap being placed on RTÉ's commercial revenue from advertising, with the gap made up by an increase in public funds

The Government is also commissioning an economic assessment of the advertising market in Ireland.

That market has seen a 40% drop in available revenue during the recession.

Factors affecting the market include the rise of online advertising and British stations selling advertising targeted at Irish customers.

TG4 is being instructed to review its five-year plan by the end of September on the basis of no increase in its current funding.

The plan which it had submitted was predicated on incremental increases in public service funding.

TG4 must also develop methodologies for quantifying and increasing its audience among Irish speakers.

It also says TG4 should examine a range of options around making savings in the delivery of present Irish language broadcasting functions.

Broad welcome for proposals

RTÉ welcomed the Government's position.

Director General Noel Curran said: "In particular we welcome the recognition of the value and importance of sustaining Irish public media in the face of extensive global competition.

"Irish public service media plays a crucial role in the social, cultural and political life of this country.

"While welcoming the recognition of the need for RTÉ to be properly funded, we have also consistently recognised that any funding carries huge responsibilities for us.

"We have made enormous gains in efficiency and cost reduction in recent years but we should never be complacent. Similarly we are also increasingly aware of our role in the wider Irish media market and have already indicated our willingness to discuss that role, so long as Irish media production is protected.

"We look forward to working with the consultants appointed by the Department to show the work already done and to seek whatever further gains we can."

The BAI also welcomed the Government's response.

In a statement, it said: "The Authority is satisfied that the Government's position is in broad alignment with that of the BAI's.

"Critically, there is a shared view that there should not be any immediate increase in the licence fee, but that additional public funds are likely to be required, particularly in the case of RTÉ, in the future."

Sinn Féin spokesperson on communications Michael Colreavy said the proposed charge will only be fair when every home in the country has access to sufficient broadband.

Mr Colreavy said: "I fully accept and support that public service broadcasting should receive funding from the state.

"However, plans to replace the TV licence fee with a new public service broadcasting charge must be justified.

"Minister Rabbitte must address broadband speeds before he begins to charge households for a service they cannot access."